7 December 2016
Impact of demonetisation on Indian student recruitment
As part of an anti-corruption drive, the Indian Government announced in early November that it was replacing 500-rupee notes (approximately NZ$10) and removing 1,000-rupee notes ($NZ20) from circulation. Together, these account for approximately 86 per cent of Indian rupees in circulation.
The government has implemented a deadline of 30 December for people to exchange the old currency notes at banks.
In the student recruitment market, key impacts have already been felt:
- There are maximum daily limits for banks to exchange money, which is creating delays in student loan processing for international students, and in Immigration New Zealand’s (INZ) ability to verify financial documents and process visas.
- Study abroad has become more expensive but conversely, New Zealand has become relatively more cost effective as the Indian rupee has dropped more against the Euro and USD than the NZD and AUD.
Longer term, the supply of ‘grey money’ to finance significant purchases will be reduced, including for education. This may impact study abroad numbers. However, student loan costs may fall as a reduction in overall money supply (some grey money will not be exchanged) will reduce loan interest rates and inflation. It’s too soon to tell the significance of these impacts, but it’s more likely that rural and agricultural cash-based regions such as the Punjab will be affected.
ENZ’s Regional Director South, Southeast Asia and the Middle East, John Laxon, said the repercussions of this change are still playing out.
“The changes are likely to result in some delays in Indian student applications over the next few months for all countries, while any significant longer-term impacts are still to be worked through,” said Mr Laxon.
“We have provided an update to education agents to keep them informed of New Zealand’s student visa approach. We will monitor visa numbers with INZ and keep education providers updated,” added Laxon.